Record Industry Still Singing the Blues (WS Journal)

This season's slide is evidence that, despite a brief uptick in music sales at the end of last year, the music-industry meltdown that began more than five years ago is far from over. The long decline has been fed by a combination of factors -- including online piracy, CD burning, high prices and competition for consumer dollars from video games and DVDs.Lately, people in the music industry have said the same basic issues have been intensified by the growing popularity of pricey gadgets such as Apple's iPod and Microsoft Corp.'s Xbox 360, as well as the rising prices for games that go with the new platform.

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Don VanCleave, president of the Coalition of Independent Music Stores, says blame lies with "an absolute, gigantic cesspool of really bad bands."

The music industry hasn't connected broadly with fans since the late-1990s heyday of the teen pop performed by the Backstreet Boys, 'N Sync and Britney Spears. "It's almost like we need a new genre of music," says John Sullivan, chief financial officer of Trans World Entertainment Corp., which operates music stores under the FYE and Coconuts names, among others. "There hasn't been anything fresh to get consumers excited in a while."

Yeah, so stop recording so much rap and focus on some real talent. Glad to see Eminem and 50 Cent didn't fare so hot.

"There is still a viable, interested music buyer," Werre contends. His company has recently seen strong performances by older titles from the Beach Boys, Dean Martinand Keith Urban, among others.

See? Catalog artists can sell if done with class and intelligence. AndElvis? Yeah, right. No thanks to BMG's dropping of the ball since 2002 with bombs like "Love, Elvis."

Mike Dreese, co-owner of New England entertainment chain Newbury Comics Inc. and a board member of the National Association of Recording Merchandisers, says that pricing remains a major problem for the music industry, especially compared with DVDs. "The new Harry Potter movie came out and they're offering $7 videos from the previous movies," he says. "You don't see any $7 Beatles albums."

Great point.

"And the fundamental trend in physical music is downward."

Sigh. I just can't get excited about the download/ computer stuff. The industry will kill off what was actually good about the record / music store experience.

Sun Dec 25, 2005 4:38 pm

As the same problem besets the movie industry - it would be logical to suggest that culprit is more likely to be more and more opprtunities for teenagers to spend their cash eg X-Boxes.

Thu Dec 29, 2005 5:56 am

It's true. I see a gaggle of teens around those game sections in department stores but music seems of little interest comparably.

Thu Dec 29, 2005 6:10 am

This is why I got on the industry so. Music is only outstripped by video games as an entertainment choice. However, you can rent video games and, for young people at least, the hours spent playing a game are far more than they give a favorite album and for many more intense. Many people use music primarily as background.

Downloading is a part of it (although the industry should just embrace the new technology with "reasonably" priced technology). However, for the most part they continue their market practices as if nothing has happened. I was at Circuit City the day after Christmas and the post-Christmas sales on DVDs were nowhere near the sales on CDs. Many DVDs were available under $10 and $10 seemed to be absolute rock bottom for some DVDs. It's just not even a fair fight. I bought two DVD sets for $30 each ("Seinfeld" and "Andy Griffith" seasons). For one season, I got 16 hours of video and audio plus extras for Seinfeld. For the same price I could have gotten two 45 minute CDs. And unless it's a favorite artist, it might be twenty minutes of enjoyable music.

Thu Dec 29, 2005 7:52 pm

I've come around on that point, LTB.

I like that the guy from Newbury Comics (a New England indie chain that many of you would like) says bluntly that the ten dollar mark has to be broken for albums to move again.

I noticed that he was able to finagle some new releases at $9.99 as of last year. He surely was either taking a loss or a thin margin.

Businesses have a hard time with lowering prices. Really, the RIAA's prices ideally would ebb and flow as do gasoline prices in the USA.

The way they are wed to $14-18 per CD is going to kill them.

Thu Dec 29, 2005 8:15 pm

WAH WAH WAH. The poor ol record companies who have been raping us for years are finally starting to see that people will find another way to spend their hard earned cash!

The facts are that people will start slowing down what they own when they realize that for a fee..monthly, yearly..whatever, they can get anything they want.

I agree that music of late has been sucking...though Eminem's bow out wasn't so bad. He is hardly the worst of the lot. And the last song "When I'm Gone" is very enjoyable.

Still it is the calm before the storm. A new revolution will come. Hip hop is another fad that will eventually die....or at least quiet down.

The facts are that you have the grunge "shoot yourself in the head" music from the 90's to thank for the death of rock.

As for the CD sales. So what. DVD sales are kicking more ass everyday. If the record companies want to cry, well they have no one to blame but themselves. Isn't it Sony that is the Music giant yet they produce recorders and blank CD/DVD's on the side? Kind of hypocritical if you ask me.

What you really have to look at is how many computers were bought..how many Ipods..DVD players, DVD. That is where the real sales are. Did I mention Sattelite radio with Stern baby!!

Record Bu$ine$$

Thu Jan 05, 2006 5:27 am

It's hard to shed a tear for a bunch of mega buck companies that have been raping the public for years - and if the tales are true, the artists, too. They've gotta face the facts that there are many more entertainment choices than there were 20 years ago. How much money can a person possibly spend on entertainment? We've got CD's, DVD's, concerts, video games all competing for our dollars, and the prices - particularly concerts - keep going up. I can't possibly afford everything I want, and all my "fun money" can't go to CD's - I've got a serious addiction to Krispy Kreme donuts! How about a free CD with every dozen donuts bought? KK reports money woes as well, maybe a cross promotion like that could help both. I'd be happy to make my next concert tour a tour of donut shops! "thankyouverymuch" a hunka-hunka-burnin' donuts"